CIT Vs Adani Wilmar Ltd (Gujarat High Court)
Gujarat High Court held that since provisions of DTAA would override the provisions of the Domestic Act where the provisions of the DTAA are more beneficial to the assessee. Thus, section 206AA of the Income Tax Act doesn’t override the provisions of 90(2) of the Income Tax Act.
Facts- The issue involved in this group of appeals pertains to alleged short deduction of TDS and raising demand by invoking provisions of section 206AA of the Act. The respondent has deducted TDS at the rate mentioned in DTAA treaty between India and respective countries or as per the rate mentioned in the Income Tax Act,1961 whichever is more beneficial to the assessee and even in the cases where recipient of the payments who are non resident parties and did not furnish PAN. The appellant Revenue therefore by invoking section 206AA of the Act held the assessee liable for obligation to deduct TDS at higher rate on payment made to non residents, who did not have PAN, at the rate of 20%.
CIT(A) held that the assessee is not liable to deduct the tax at a higher rate in view of the provisions of section 90(2) of the Act. Tribunal upheld the decision of CIT(A). Being aggrieved, revenue has preferred the present appeal.
